Insight: U.S. taxpayers poised to subsidize Asian coal demand

Comments (16)
Bob9999 wrote:

“‘A key question is whether the taxpayer is getting a fair return on the use of those lands,’ said Lynn Scarlett, who served as a deputy to two Secretaries of the Interior under President George W. Bush between 2005 and 2009.”

Let’s face it. One constant of American government is that the taxpayer NEVER gets a fair return on the use of government lands. Please note the vastness of Federal land holdings. If the taxpayer got a fair return, we wouldn’t have a budget deficit. Indeed, the fact that Federal land rights are typically given away to industrial concerns that hire influential lobbyists is the biggest argument there is against allowing drilling or mining activity on Federal land. If advocates of drilling or mining on Federal land were sincerely interested in benefiting the country as a whole, they would be seeking to do away with all programs that provide for-profit concerns with access to Federal land rights at less than market value.

Oct 18, 2012 7:12am EDT  --  Report as abuse
americanguy wrote:

This is the exact same issue as with oil from Federal Lands. Romney kept bringing up how Obama did not let oil companies drill freely on Federal Lands. The US now exports oil, and exports over 2 million gallons of fuel a day. For the first time since 1948, the US is a net exporter of fuel. The main reason the oil companies want to drill more and get cheap oil from Federal lands, is to export the oil and fuel made from it, to Asia. As we see, no matter how much less fuel America uses, or how much of surplus there is, gasoline prices still rise or stay high.
Another Romney lie exposed.
As for coal, we have more than we can ever use, just put a hefty special Federal tax on exported coal from Federal lands, and help reduce our debt.

Oct 18, 2012 7:14am EDT  --  Report as abuse

This is an excellent piece of journalism. Kudos to the authors. My only wish is that there was some discussion of the true cost of the environmental impact of allowing the below-market price sale of coal from US public lands. Not only do we lose income to the US Govt. but we face huge environmental impacts from CO2, so the tax payer is screwed twice. Please post this on
Respectfully, Sam Clark

Oct 18, 2012 7:28am EDT  --  Report as abuse
Lloyd_L wrote:

“It should be noted that the Bureau is obliged … to obtain fair market value, not maximize value, for federal coal,” a department spokeswoman said on Wednesday.

This is a distinction without a difference.

It is also a symptom of the problem that results when you put the government in charge of things whether it be property or regulation. The more government you have, the more it favors large corporations and labor unions over small business and the people that work for small business.

Oct 18, 2012 8:55am EDT  --  Report as abuse
ScroogeYou wrote:

More wealth for the “entitled” wealthy. Do we REALLY need to keep distributing the wealth of this nation to the already wealthy?
End “entitlements” for the wealthy!

Oct 18, 2012 9:23am EDT  --  Report as abuse
northcentral wrote:

Currently the US has a trade deficit of over $700 billion. It is wide to use our resources to off set this imbalance. Also, we owe China about $1.4 trillion in debt, so our government officials have not left us (the ones left in this country) in good condition to negotiate. If you include our deficit (negative $1.09 trillion) our debt (negative $16 trillion) and our unfunded obligations of SS, Medicare/Medicaid,it is about negative $54 trillion. We are in poor financial health and no one want to address it.

Oct 18, 2012 9:29am EDT  --  Report as abuse
Stickystones wrote:

A global economy is a nice theory but in practice it puts many domestic policies in a contradictory position – such as natural resources from Federal lands. It isn’t just energy commodities such as coal and oil, but lumber and minerals too. The american government priorities should put the taxpayers in the front seat and demand profit sharing from companies who exploit domestic natural resources. We need the resources and the companies who exploit them, but it needs to be a ‘fairer’ rate of return.

Oct 18, 2012 9:31am EDT  --  Report as abuse
Upstate184 wrote:

So there’s an outcry against subsizing clean energy but subsidizing dirty energy for our economic competitors in Asis is OK?

Oct 18, 2012 9:41am EDT  --  Report as abuse
JusticeNow4U wrote:

I think this article is misleading. I agree the US taxpayer is getting a poor payback for the use of federal lands but the coal companies are reaping the windfall and not Asian coal consumers.

The article implies there is some form of price control that would force US coal producers to sell US coal overseas and some reduced rate thereby providing a windfall to Asian consumers.

We simply have a government ‘take’ issue and in fact as in most parts of the world the government ‘take’ changes over time as reserves go from speculative to proven.

US Government take is among the most attractive in the world in coal, oil and gas = so the US taxpayer gets taken in most natural resources produced in the USA

Oct 18, 2012 10:31am EDT  --  Report as abuse
StigTW wrote:

You could also say that by shipping surpluses to Asia is effectively subsidizing your lower local costs for coal. You can put as much tax on it as you like but yes there’s competition and should it be taxed up Asian countries just buy it elsewhere, which then US coal co’s demand higher returns on local prices making US costs higher. Coal is not in shortage on this planet by any stretch.

Oct 18, 2012 10:39am EDT  --  Report as abuse
LDC2U wrote:

Your article’s statement that the low cost of PRB coal aids the U.S.’s international competitors like China is incorrect. The vast majority of PRB coal originates in Wyoming, and USDOE/EIA data for 2010 show that 435 million tons of WY coal was used domestically, while 5 million tons was exported. Whatever advantage was gained by minimizing the cost of PRB coal was enjoyed nearly one-hundred fold by the U.S. vs all foreign consumers combined. In other words, this low cost resource greatly advantages the U.S. relative to its foreign competitors. Likewise, the statement saying the “argumnent [that low cost coal helps a region providing a large share of fuel for U.S. power] has crumbled” is also contradicted by the data. USDOE/EIA reports that, in 2011, 43% of U.S. power generation was fueled by coal, and 47% of U.S. coal production was subbituminous coal. D.Carter

Oct 18, 2012 11:00am EDT  --  Report as abuse
AlkalineState wrote:

No export of U.S. energy should be allowed. Not while we’re importing anyway.

Oct 18, 2012 11:16am EDT  --  Report as abuse
AlkalineState wrote:

The whole federal mineral lease system needs an overhaul. The public has owned these resources since about the time of the Louisiana purchase. A ‘mineral lease’ is actually a give-away (for about a dollar an acre) to some company to take ownership of the minerals and sell them back to the public at a very high mark-up. Why do we tolerate this racket?

We should contract with companies for extraction and delivery services only. But the ownership of public minerals should stay public.

Oct 18, 2012 11:21am EDT  --  Report as abuse
Jim1648 wrote:

As has been noted, we are also subsidizing the production of CO2. It will be an interesting economic comparison to see how much that costs us in increased droughts, including loss of agricultural production and welfare for farmers (if we can afford any) as compared to the loss of tax revenues on the coal itself.

Unfortunately, the comparison can only be done in 100 years.

Oct 18, 2012 11:48am EDT  --  Report as abuse
debeddebed wrote:

Obama’s EPA rules are shutting down the US coal electric producing
power plants. Thus, the coal industry MUST find new markets.
Obama wants to share the wealth with everyone except America.
Therefore, it is OK for China to generate power with “dirty” coal.
The EPA is in place to promote the United Nations One World Government.
Remember when Obama said he would make it too expensive for coal
plants to operate?

Oct 18, 2012 12:18pm EDT  --  Report as abuse
JonnyBrou wrote:

Really what matters is whether the subsidy makes more money in taxing exporters than it costs to give the subsidy. The idea is to promote exports anyways. It just wouldn’t make sense if it doesn’t net more government revenues. Who cares if it goes to Asian coal demand? It’s just bad for the environment, if that matters to you.

Oct 18, 2012 12:19pm EDT  --  Report as abuse
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